Relating to an exemption of the transfer of certain rights in water from certain disclosure requirements applicable to the transfer of certain interests in real property.

Contracts

• Purchase and Sale Agreements (PSAs): Review standard templates for water rights transfers. Remove "Savings Clauses" or "Statutory Notice" appendices that automatically incorporate Property Code § 5.011 (Annexation), § 5.014 (HOA), and Natural Resources Code § 33.135/61.025 (Coastal/Erosion) for water-only deals.
• Deed Preparation: Ensure the granting clause is strictly limited to groundwater or surface water rights to qualify for the exemption.

Hiring/Training

• Closing Teams & Title Agents: Staff must be trained to identify the asset class immediately. They must stop attaching "standard" real estate disclosure packets to water rights files, as doing so may now create confusion regarding the nature of the asset.

Reporting & Record-Keeping

• File Documentation: While you are removing forms, you must document the *reason* for the omission. Create a standard file memo for water-only closings stating: *"Statutory real property disclosures withheld pursuant to SB 2550 (Exemption for Water Rights)."*
• No New Filings: There are no new government reporting requirements.

Fees & Costs

• Cost Reduction: Minor administrative savings due to reduced paperwork and packet preparation time.
• Liability Reduction: Eliminates "technical foul" liability where a contract could previously be voidable for failing to disclose a coastal erosion notice on a groundwater permit sale.